Tit-for-tat tariff escalations came to define trade policy in President-elect Donald Trump’s first term but he also embarked on multiple market-opening negotiations that analysts say he could revive in his second term.
The first Trump administration retooled a trade agreement with South Korea, negotiated a limited trade deal with Japan and revamped the North American Free Trade Agreement while embarking on FTA negotiations with the United Kingdom and Kenya.
Analysts say that a return to tariff-cutting deals – either through comprehensive free-trade agreements or narrower deals – is likely under the new administration.
“I think there is an interest in doing trade agreements that have market-access potential,” Everett Eissenstat, who served as an economic adviser to the president in his first term, told Agri-Pulse. “I think he's going to want to negotiate.”
The countries that have had negotiations on ice since Trump left office, Eissenstat and others say, will likely be at the front of the queue for any new deals.
A UK FTA
The U.S. and UK formally launched FTA discussions in May 2020. But the Biden administration pursued a downgraded “foundational” agreement, before shelving talks altogether.
“The prior Trump administration was fairly far along in discussions with the United Kingdom,” said Tim Brightbill, who co-chairs the international trade practice at law firm Wiley. Accordingly, the country would be at the top of any dealmaking list, Brightbill said. “It wouldn't surprise me if we re-initiated those discussions.”
As well as deepening ties with a strategic partner, pursuing a UK deal would align with some of Trump’s trade priorities. The president-elect has been focused on eroding the U.S. trade deficit. The United States, however, already enjoys a more than $20 billion trade surplus with the UK, increasing the attractiveness of a U.S.-UK deal, said Daniel Mullaney, a nonresident senior fellow at the Atlantic Council and former assistant U.S. trade representative.
But even if discussions restart, securing a comprehensive FTA with the UK would be no easy feat, analysts say. Agriculture was a major sticking point in talks between the Biden administration and London under Conservative Prime Minister Rishi Sunak, Politico reported at the time, and UK officials have stressed in recent weeks that the new Labor government under Keir Starmer won’t compromise on food standards to secure a U.S. trade deal.
“In the past, we've seen the UK – like the EU – seeking carve-outs from that kind of a comprehensive approach, or exceptions, whether it's in the ag space, or in the data privacy space,” Brightbill said, adding that he could see a scenario where an FTA proceeds without agriculture provisions.
If agriculture is included in a final deal, Mullaney said, there may be significant safeguards to protect specific UK ag industries. These could consist of tariff rate quotas that allow certain volumes of U.S. commodities to enter the market duty-free or specific sanitary and phytosanitary, animal welfare or other standards for exports.
Further compounding the challenge, Eissenstat said, is the return of Starmer's Labor Party.
“The UK government right now is not very well-aligned with the Trump administration ideologically, so I don't know that this is the right time to be doing a trade agreement with them," he added.
Kenya
Similarly, the U.S. held talks with Kenya on a possible FTA during Trump’s first term, with officials arguing the deal could serve as a template for agreements with other sub-Saharan African nations. Biden dropped the negotiations before launching new discussions on a trade and investment partnership without market-access provisions.
Restarting FTA discussions with Kenya, multiple analysts said, could hold geopolitical value, as China pursues deeper trade ties with African economies. Trade reciprocity was also a central part of Trump’s economic message on the campaign and Kenya already enjoys some duty-free access to the U.S. market under the African Growth and Opportunity Act.
Pursuing a comprehensive deal with Kenya would also have its advocates in Congress.
“I would suggest continuing where Trump left off with starting negotiations with trade with African countries, specifically Kenya,” Iowa GOP Sen. Chuck Grassley told reporters on Tuesday.
UK and Kenya FTA negotiations may n
Brian Kuehl, executive director at Farmers for Free Trade.ot unlock significant markets for U.S. agriculture – particularly if political obstacles prove insurmountable in the UK. But Brian Kuehl, executive director at Farmers for Free Trade, told Agri-Pulse that agreements with both could harbor further liberalization efforts.
“Even if they're not really moving the needle that much in terms of export access, at least it's getting us back into the habit of executing trade agreements, passing them through Congress and demonstrating that they're beneficial to the U.S. economy,” Kuehl said.
Other deals
There are also a number of other economic relationships that received significant attention during Trump’s first term that could be candidates for deeper trade ties.
“It's worth keeping an eye on the U.S.-Japan relationship,” Brightbill said. The two governments negotiated a limited trade deal in 2019 that lowered some tariffs. Both Eissenstat and Brightbill noted there are possibilities for building on that agreement.
The frontrunner to become Germany’s next chancellor has also expressed interest in reviving discussions on an EU-U.S FTA. Mullaney argued that a potential trade deal with the EU may be “something to watch.”
The U.S. has a number of outstanding trade issues with the bloc – including a pending deal on green steel and aluminum, a trade dispute over civil aviation aircraft and frictions over EU digital services taxes.
“There is some interest on the part of the European Union in working with this administration to see how they could achieve some win-win goals,” Mullaney said, adding, “when it comes to the EU, agricultural products are always one of the items on the menu, so to speak.”
While China is not in line for an FTA, Mullaney pointed out that Trump could pursue a new deal with Beijing to address some of the festering trade issues. The two parties signed the phase one deal during Trump’s first term, under which Beijing pledged to ramp up purchases of U.S. goods, including agricultural products. China failed to make good on its commitments, however.
A new deal could go beyond simple purchasing commitments, Mullaney said, and tackle issues like subsidies and manufacturing overcapacity.
“It would focus on some of the practices that are problematic in China, like subsidies, the state enterprises operations, the forced technology transfer, intellectual property rights,” he said.
Tim Brightbill, co-chair of Wiley’s international trade practice. Congressional priorities
Comprehensive FTAs that reduce tariffs across multiple industries need congressional approval. And if Trump wants to streamline that process with a simple majority in an up or down vote, he will need to get input from Congress on negotiating objectives by reviving the president's expired trade promotion authority.
While many Republicans would welcome a return to negotiating comprehensive FTA negotiations after a four-year hiatus under Biden, lawmakers also have their own views on how to use duty-free access to the U.S. market to further U.S. policy goals.
Rep. Nicole Malliotakis, R-N.Y., for example, told Agri-Pulse this week that she would want to focus on deals that bolster ties with friendly nations.
“I think where we should be looking is those countries where we can benefit by near-shoring, friend-shoring,” the Ways and Means Committee member said. “Is there a way we can use our trade agreements to work with friendlier nations so we're not relying on Communist China?”
Reps. María Elvira Salazar, R-Fla., and Adriano Espaillat, D-N.Y. and Sens. Bill Cassidy, R-La. and Michael Bennet, D-Colo., have also proposed providing pathways to expand the U.S.-Mexico-Canada Agreement to regional neighbors.
“Really what you need is leadership from the White House saying, ‘Okay, I want to move these trading agreements forward. Give me trade promotion authority,’” Kuehl said. He added that the incoming administration should not be deterred from pursuing comprehensive FTAs by the complexity of negotiating and shepherding the deals through Congress.
“It's easier to negotiate many deals that are not FTAs. It's easier to do sort of purchase agreements that get you a headline, but ultimately, don't have staying power,” Kuehl said. Such deals, he warned, don’t “have the same heft as an FTA. And, ultimately, for our long-term stability of U.S. ag, we need to be opening markets with FTAs.”
